What's Wrong With Tech?

And in periods of disruption, earnings growth rates actually fall as companies either lose to disruptive competitors or are forced, as Amazon now is, to spend more to fend off the challenge of disruptive technologies.

The one big surprise in all of this to me is that we didn't get a longer period of consolidation out of the Internet technologies. eBay(EBAY Quote) and Yahoo!(YHOO Quote), two of the most successful companies to emerge from the Internet generation, didn't get much chance to rest on their leadership positions before the disruptive Google(GOOG Quote) emerged.

I don't know whether the consolidation period for the Internet technologies was so short because of something about the technology itself -- low barriers to entry by new competitors seem to be part of the character of the technology -- or because of the way the crash of 2000 interrupted the revenue growth curve so that many companies didn't mature before the next wave of disruptive technologies emerged.

But we are back in the disruptive phase of the technology cycle.

New Developments on Past Columns

Six Ways to Invest in the Coming Coal Boom: Alstom won a $550 million contract from European utility RWE for a clean coal plant to be built in Neurath, Germany, by 2010. This is the first contract Alstom has won for a new clean coal plant based on the superior technology of the company's supercritical boilers. Supercritical boilers operate at much higher temperatures and pressures so they burn coal much more efficiently.

The contract is a major validation for Alstom: It's one thing for the company to claim superiority for its clean coal boilers, and it's something quite different for a customer to buy that technology with real money. This deal pushes Alston's orders in its power-equipment business to $3.6 billion over the last six months. Considering that the entire business produced revenue of just $6 billion last year, it looks like Wall Street estimates for 5% revenue growth may be low. (The company reported orders grew by 66% in the quarter it reported on Jan. 12.)

Alstom is listed only on the Paris market -- it doesn't trade as an ADR. You can buy the stock and track its price under the symbol AOMFF on our site. Buying AOMFF will get foreign ordinary shares, exactly the same shares that trade on the Paris exchange.

Be careful when you buy -- try a limit rather than a market order -- because the bid/asked spread can be high; it was almost $1 a share when I checked on Jan. 20. You may also have to pay an extra commission charge to buy the ordinary shares. An electronic brokerage firm I use regularly quoted me an extra $50 fee. (When I calculate the gain or loss on this position when I sell, I will include that extra fee along with the usual commission charges.) As of Feb. 21, I'm raising my target price to $92 a share by June.